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Sharpton owes nearly $1.5 million in back taxes

The Rev. Al Sharpton still carries baggage from his early days as a fire-breathing agitator: Records indicate he and his business entities owe nearly $1.5 million in overdue taxes and penalties.
The Rev. Al Sharpton has emerged over the past decade as New York City's most prominent civil rights leader. Government records indicate that Sharpton and his business entities owe nearly $1.5 million in overdue taxes and penalties.Bw / AP
/ Source: The Associated Press

Big corporations give him money. Presidential candidates seek his endorsement. He has influential friends in Congress and the governor's mansion.

The Rev. Al Sharpton has emerged over the past decade as perhaps the nation's most prominent civil rights leader, a status that was demonstrated again this week when he led protests against police brutality that briefly shut down six of Manhattan's major bridges and tunnels.

But he still carries baggage from his early days as a fire-breathing agitator: Government records obtained by The Associated Press indicate that Sharpton and his business entities owe nearly $1.5 million in overdue taxes and associated penalties.

Now the U.S. attorney is investigating his nonprofit group, an inquiry that an undeterred Sharpton brushes off as the kind of annoyance that civil rights figures have come to expect from the government.

"Whatever retaliation they do on me, we never stop," Sharpton said. "I think that that is why they try to intimidate us."

Big jumps in donations, income
Over the past year, Sharpton's lawyers and the staff of his nonprofit group, the National Action Network, have been negotiating with the federal government over the size of his debt, which they dispute. The group has also been trying to pay off tens of thousands of dollars it owes for failing to properly maintain workers compensation and unemployment insurance.

Charles King, the organization's interim executive director, said both Sharpton and the group he leads were unprepared for their rise in stature in recent years and had trouble dealing with big jumps in donations and income.

"The infrastructure was trying to keep up with that pace, and it was not a perfect fit," he said Friday. "The National Action Network may not have been perfect, but nothing was going on that was untoward."

He said the organization has new accountants and a new administrative team, and the group recently finally filed long-overdue tax returns.

Sharpton's own debts include $365,558 owed in New York City income tax and $931,397 in unpaid federal income tax, according to a lien filed by the Internal Revenue Service last spring. His for-profit company, Rev. Al Communications, owes the state another $175,962 in delinquent taxes.

As for Sharpton's personal tax debt, King said Sharpton has started paying it off but contends that faulty record-keeping by the National Action Network led the government to overestimate his tax liability.

Tax headaches are nothing new
The 53-year-old minister has been assailed over his career for running up big tax debts and failing to abide by rules governing his charities and election committees. He is perpetually being sued for failing to pay his bills.

In December, Sharpton revealed that as many as 10 of his associates had received grand jury subpoenas. A person familiar with the investigation told the AP that the FBI and IRS are probing whether Sharpton or his organization committed tax crimes or violations related to his 2004 presidential campaign, during which he was forced to return public matching funds for breaking fundraising rules.

If any of this worries Sharpton, you'd never know it. He is pressing ahead with his latest campaign — an effort to persuade the Justice Department to bring civil rights charges against New York City police detectives who fired 50 shots and killed an unarmed groom as he left his bachelor party.

Over the past few weeks, Sharpton has kept a high profile, promising to lead weekly demonstrations until new charges are brought against police detectives acquitted of manslaughter April 25 in the November 2006 death of Sean Bell.

"He is as focused as ever," said Rep. Gregory W. Meeks, a Queens Democrat who has also rallied for police reforms since the Bell case. "He is probably more effective now than he was in the past, than he has ever been."

Sharpton was arrested and spent a few hours in jail Wednesday for being among the marchers who blocked the Brooklyn Bridge to protest the verdict.

On Thursday, Sharpton said he may soon add another cause — the case of three shooting suspects who appeared to have been beaten and kicked by police during an arrest in Philadelphia.

Sharpton has been investigated before
In 1990, he was acquitted of tax fraud and charges that he stole from one of his charities. He followed that up with what was essentially another victory in a tax case by pleading guilty to a misdemeanor charge of failing to file a state return.

In the latest probe, the official overseeing the investigation is U.S. Attorney Benton Campbell — the same Brooklyn-based prosecutor whom Sharpton is urging to file criminal charges in the Bell shooting. Campbell's office has said it is reviewing the case but declined to comment further.

Sharpton's reputation has undergone a remarkable renaissance since the Tawana Brawley days in 1987, when he was accused of helping create a hoax in which the 15-year-old girl claimed she had been kidnapped and raped by a gang of whites that included a police officer and a prosecutor. A grand jury concluded that Brawley made the story up.

Since the late 1990s, his civil rights group has grown from an outfit with a few hundred thousand dollars in annual revenue to an organization that now routinely takes in $1 million to $2 million per year, thanks partly to corporate support.

Donors have included beer giant Anheuser-Busch, which gave more than $100,000 last year, and Forest City Ratner, a real estate development company that courted black leaders for support of a plan to build an NBA arena in Brooklyn. PepsiCo, for several years, gave Sharpton a compensated position on one of its advisory boards.

The group also enjoys financial support from the state's top politicians.

New York Gov. David Paterson has transferred at least $28,000 from his own re-election committee to the National Action Network since 2001. Rep. Charles Rangel, a top Democrat in Congress, has been another major backer, giving at least $83,000. New York Attorney General Andrew Cuomo has given $10,000.

"Everybody who runs for office in the Democratic Party wants to meet with him," said former Mayor Ed Koch, who once battled Sharpton but now calls him a friend and a "bona fide leader."

Koch said Sharpton's past will always be an issue with some whites, and he disagreed with the decision to engage in civil disobedience over the Bell case. But the former mayor believes the respect Sharpton enjoys among blacks is well earned.

"He is willing to go to jail for them," Koch said. "And he is there when they need him."